It’s easier than ever for companies of all sizes to expand their business into emerging markets using the Internet. Translating websites to serve global consumers is now an affordable best practice that can boost brand awareness and revenue.
While many companies might intellectually understand this opportunity exists, they often don’t know how to find the “right” global markets to serve. Which countries represent the greatest potential? Is one market more likely to generate ROI than another? The questions abound.
My company translates and optimizes websites for hundreds of companies in dozens of global markets. We’ve learned a thing or two about identifying expansion-worthy markets. Here are a few insights:
Cross-Border Website Traffic is Critical
First things first: Examine your company’s current website traffic metrics. Are you seeing traffic hailing from overseas markets? Make note of these countries, and then drill down into their conversion rates and average order values (AOV).
This is valuable market intelligence. Consider using this information to identify which new markets to engage. After all, these transactions indicate that whatever you’re selling is resonating with those foreign consumers.
These sales may also a signal something more significant: those overseas markets may be underserved by local stores or e-retailers.
We recently identified this opportunity for a client by examining the performance of its e-commerce site, observing the cross-border sales hailing from Mexico and Canada.
At first, Canada clearly appeared to be the expansion-worthy market. Canadians had recently bought about $600,000 in products, while Mexicans had bought only $400,000 of merchandise from the company. When we looked closer, however, Mexico quickly became the more attractive market. Some key indicators: the average order value from Mexican shoppers was nearly double that of Canadians. Conversion rates were much higher, too.
Catering to the Mexican market with a translated Spanish website would generate greater results, we reckoned. So did our client.
Go Small or Go Home
Based on our experience, companies often achieve greater global results when they engage consumers in smaller emerging markets — not larger ones.
Why? It comes down to competition. Larger, more mature markets often have far more competitive marketplaces than smaller ones.
Take Poland, for instance. This blossoming market has around 12,000 online domestic stores. France, on the other hand, has around 140,000 domestic e-retailers. It’s clear which is the more crowded and competitive online market. A company that can woo Polish consumers with a translated website stands to see a bigger lift in traffic and sales.
We’ve seen this first-hand with our clients. One e-retailer generates far more online profits in Slovakia than in Germany — despite the German market being 20 times larger than Slovakia’s. But a fewer number of domestic retailers often means local consumers are underserved. Consumer demand for cross-border solutions increases.
We recommend focusing on one or two global online markets at a time. Once your company generates great business results in those markets, repeat the process with additional markets.
Market Thought-Starters
We’ll wrap up with a few intriguing markets your company should consider, as it pursues its online expansion endeavors.
Mexico
Internet penetration continues to increase in this market, which translated into greater e-commerce adoption. (We estimate 3 million Mexicans were added to the online population last year.) And since Mexico is so close to the U.S., it’s attractive market for American companies to serve with affordable cross-border fulfillment solutions.
Central Europe
Online markets in Poland, the Czech Republic, Hungary and Slovakia are ideal for risk-averse companies. These countries have growing economies and business-friendly governments. Adoption of the Internet, smartphones and e-commerce are growing rapidly, too.
The United States
Finally, the U.S. is a great market for domestic and international companies. The Spanish-speaking U.S. Hispanic market is especially compelling. The Hispanic demographic is growing faster than the non-Hispanic average, and is online- and mobile-savvy. Next year, Hispanics’ buying power will reach $1.7 trillion.
Charles Whiteman is senior vice president of client services at MotionPoint Corp., a leading enterprise localization platform. He may be reached at [email protected].
